ADB projects Nepal’s GDP to slow down to 3.5% for 2013

The
Asian Development Bank (ADB) has projected Nepal’s gross domestic
product to slow down to 3.5 per cent for 2013. Releasing the Asian
Development outlook in Kathmandu today , the report stated that due to a
shortage of fertilizers, poor monsoon season, low investor confidence
and the lack of a full budget, which is also causing funding shortages
for ongoing development activities. The prospects of a lower
agriculture harvest, wage pressures, further upward adjustment of
administered fuel prices, continued power shortages and other
supply-side constraints are expected to push inflation to 10.5 per cent
in 2013.

Country
Director for Nepal Kenichi Yokoyama said promoting an enabling
business environment and political stability are key to improving
economic performance in Nepal.He added that, developing infrastructure
bases, particularly power, strengthening institutional capacities, and
promoting strategic and proactive policies are urgently needed to
improve investor confidence in Nepal.

With
a favorable monsoon, adequate fertilizer supplies, the timely adoption
of the full budget, and moderate expansion of remittances, ADB has
forecast GDP growth to rebound to 4.2 per cent in 2014. Assuming a
good harvest and cautious monetary policies, inflation in 2014 is
projected to ease only slightly to 9 per cent as most of the
underlying pressures of the previous year persist.